How to reconcile a paymnet that returned by the bank

It's great having you here with us, Ahmed CPA. I'd be delighted to share insights and steps to help you rectify bounced cheque payments from your bank.

When payments are rejected by your bank, it might be that your financial banking account has non-insufficient funds or doesn't have enough money to cover the cheque amount. With that, you need to enter a journal entry to reverse the bounced cheque payment. To do that:

1. Go to the + New icon and select Journal Entry.
2. Enter the date the check bounced in the Journal Date field.
3. On the first line, choose the bank account from the ▼ dropdown menu in the Account column. Then, enter the cheque amount in the Debits column.
4. On the second line, select Accounts Payable from the ▼ dropdown menu in the Account column. 
5. From the Name column, select the supplier.
6. In the Memo field, enter a note of why you created the journal entry. Then, select Save.

Once done, let's reopen the bill and link the bounced cheque to the journal entry. Here's how:

1. Click on Get paid & pay from the menu bar and select Suppliers.
2. Find and select the supplier’s name.
3. In the Transaction List, find and click on the bounced cheque.
4. Uncheck the checkbox for the bill, then select the one for the journal entry.
5. Confirm you want to make the changes, then click Save.

Then, we can record the bank fee. Here's how:

1. Click on the + New icon and select Expense.
2. From the Payee dropdown menu, select the supplier if the bank charged it to them or the bank if they charged it to your account.
3. Select the account you use to pay expenses from the Payment account dropdown.
4. Enter NSF fee in the Ref no. field to distinguish it from the other expenses.
5. Under the Category column, select Bank Charges.
6. Enter the amount you were charged for and select Save.

You can check out this article for more detailed information: What to do if your cheque bounces and your bank account has non-sufficient funds.

Moreover, I've added this reference to guide you in reconciling your account to match your bank and credit card statements: Reconcile an account in QuickBooks Online.

Let us know in the comments below if you have additional questions or other QuickBooks concerns. We'll gladly assist you further. Have a good one!

Hello

Thanks for your prompt reply. I am not sure if the above solution would work for me. The attached image is for transactions downloaded from my bank account to QB online via bank feeds. I did an EFT but put the wrong account, the bank returned/refunded the amount, I corrected the bank account and sent it again and applied the correct payment to the invoice. Now I am left with debit and credit in downloaded transactions for the same amount. from reading the reply it took care of the refunded amount but left the original payment in the bank register. 

Thansk 

Hi Ahmed CPA, 

Allow me to join the thread. I've tried to replicate on my test file the steps provided by my colleague above and confirm that you'll be able to match the transactions to the bank feed. In addition, since the bill was re-opened, you can record a bill payment. Then, you'll be able to match the refund to the journal entry created and the other one to the new payment recorded. 

For your reference, you can also check on this article: Enter supplier credits and refunds in QuickBooks Online. 

Feel free to drop a comment below if you have any other questions.